Australia should leverage India as regional hub for South Asia infra push: Report
New Delhi, Aug 14
Australia should place India at the centre of its South Asia regional strategy to unlock greater trade, energy and infrastructure integration, a new report has said.
The report from Australia-based policy think tank, Lowy Institute, said Canberra should launch a second phase of Comprehensive Strategic Partnership that would complement the bilateral Renewable Energy Partnership.
Australia's Comprehensive Strategic Partnership with India has taken bilateral trade, defence ties, and renewable energy collaborations to record heights.
The successor program should place India at the centre of the South Asia Regional Infrastructure Connectivity's (SARIC) regional strategy to drive gains from solar supply chains, hydrogen, storage, investment and workforce skills, the report argued.
"A renewed SARIC should establish an India-anchored project-preparation window. Participating governments could nominate cross-border projects, beginning with the Bangladesh-Bhutan-India-Nepal subregion," the report said.
The think tank called India the economic heavyweight and geographic centrepiece of South Asia, urging Australia to treat New Delhi not just as a bilateral partner but as the central node in South Asia's regional future.
India could lead technical coordination with its grid and transport systems and Australia could fund feasibility studies, regulatory design, procurement frameworks along with environmental and social safeguards. After the project preparation stage, the World Bank, IFC and other development banks could finance them.
Funded by Australia and delivered with the World Bank and International Finance Corporation, SARIC was a $32 million (Australian dollar) programme operating from 2019 to 2024 across Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka. It helped governments prepare transport and energy projects capable of attracting public or private finance, and ran professional training for implementing them.
Electricity trading should be focused wherein SARIC could help develop compatible grid rules, bankable power-purchase agreements, shared storage and balancing arrangements. It could later support transport corridors for clean-energy equipment around the Bay of Bengal.
"Australia does not need another grand infrastructure fund before it has a credible pipeline. It needs to renew a tested instrument. India can provide the scale, geography and leadership, while SARIC can provide the institutional machinery," the report noted.
— IANS
Reader Comments
The BBIN subregion focus is interesting - this is where India's Act East and Neighbourhood First policies can actually deliver real outcomes. The solar supply chain angle is particularly smart given India's ambitious renewable targets. Happy to see Australia putting substance behind their Indo-Pacific rhetoric.
As an Australian, I think this is the right direction. We've been too focused on China and not enough on our opportunities with India. If we can help build cross-border energy and transport infrastructure in South Asia, it opens enormous opportunities for Australian firms too. Win-win.
Interesting but I wonder how much traction this will get in Canberra beyond the think tank level. Australia is sometimes slow to act on these reports, especially with changeable governments. Still, the logic is compelling - India is the only country in the region with the scale and leadership to tie this together.
The Bangladesh-Bhutan-India-Nepal subregion angle makes a lot of sense. Electricity trading between these nations is under-exploited and there's huge potential for hydro and solar. But the report should also think about how to involve Pakistan if it's serious about "South Asia" - otherwise it's just SAARC all over again with India-centric projects. Just saying. 🤔
The earlier SARIC programme ($32 million) proved that the model works. Rather than setting up grandiose funds, renewing what we know works is pragmatic. Australia should increase the envelope though - $32M is paltry compared to what China pushes into infrastructure in the same region. We need serious money to match the scale of the challenge.
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